City waives $1 million affordable housing contribution; council to consider restoring half next year.

Alexandria  "Half a loaf is better than nothing. Does it tie our hands? Yes. But it's the right thing to do."

— Vice Mayor Allison Silberberg

Hidden in the margins of the incentive package Alexandria leaders offered to lure the National Science Foundation from Arlington was a million-dollar motivation. Officials at City Hall said they were willing to waive the $1 million contribution to the Affordable Housing Trust Fund. City Council members later said they didn't know the incentive was part of the package until it was too late. Removing it might jeopardize the deal, putting City Council members in a difficult spot.

"It was my oversight," said Deputy City Manager Mark Jinks. "I take full responsibility."

Fixing the problem was difficult and divisive for council members. Some were willing to let the affordable-housing contribution go the way of floppy disk. Others wanted to see the full contribution. Councilman John Taylor Chapman offered a compromise motion to direct budget officials to earmark $500,000 worth of tax revenue from the property to affordable housing during the next budget cycle. Although he initially circulated a memorandum outlining a $1 million contribution, he ended up cutting it in half to make sure he had the necessary support.

"To be honest, I didn't think I would the votes to pass it," explained Chapman of the million-dollar proposal. "Some folks were not behind that idea."

IN THE END, Chapman's motion was opposed by Councilman Paul Smedberg and Councilman Justin Wilson, both of whom opposed the idea of setting aside revenue in a budget that doesn't yet exist. They also argued that the addition of the National Science Foundation will create new development that will contribute to the affordable housing trust fund, a rising tide that will lift the Affordable Housing Trust fund eventually.

"This is saying that $500,000 needs to go to affordable housing before it goes to anything else in the budget," said Wilson. "I object to that."

Vice Mayor Allison Silberberg said she was witnessing a disturbing trend in recent months. First budget officials removed a dedicated revenue for affordable housing during the budget process even though council members had not given explicit instructions. Council members had to put that back on the docket and add it back, even though some members opposed the move. Then council members declined to recommend increased funding for affordable housing during a work session about a housing master plan. A series of funding scenarios was moved to the appendix of the document. Now council members were being confronted with a $1 million hit to the Affordable Housing Trust fund, a part of the deal some said they did not know about until it was too late.

"Half a loaf is better than nothing," said Silberberg, adding that she would like to see the full $1 million added back. "Does it tie our hands? Yes. But it's the right thing to do."

SINCE 2002, city officials have included a "voluntary" contribution to the Affordable Housing Trust Fund as part of negotiations leading to development deals. City officials calculate that the contribution for the National Science Foundation would have been $1 million if the deal had not been offered. Advocates for affordable housing say they would have pressed for some kind of other arrangement had city officials notified the public of the plan before it was too late to jeopardize the deal.

"That seems like an oversight," said Francis Zorn, an Old Town resident who testified during the public hearing. "I think it's a very bad precedent to set."

Councilman Paul Smedberg argued that adopting a resolution to set aside funds before a budget was ready was a bad precedent. Smedberg was one of the strongest voices calling for an end to dedicated sources of funding for affordable housing. And when council members convened for a work session to consider increased funding for affordable housing, he was one of the members to include the funding options in the appendix because he did not feel enough information had been presented.

"There's not a trend here," said Smedberg, responding to Silberberg.

CITY OFFICIALS were clear that the vote to potentially restore $500,000 was not binding. It merely instructed staff to consider adding $500,000 when the budget documents are presented early next year. Council member will have the final say when they approve a final budget after adding and deleting items from the list of spending priorities. Although Councilman Tim Lovain has often been critical of dedicated sources of revenue, he said he would vote with the majority on this one because no money is actually being set aside.

"There is no set-aside," said Lovain. "This is aspirational."

Last year saw the issue of affordable housing take a prominent role in debate over the Beauregard small-area plan. Washington-based developer JBG plans to demolish 2,500 units of market-rate affordable housing that are now clustered along the sweeping hills of the West End. City Council members secured a deal that would create 800 units of dedicated affordable housing, a plan that is financed with $52 million from the developer as well as tax-increment financing from future residents. Critics say the city is replacing only a fraction of the units that are being demolished, which means that waiving the contribution for the National Science Foundation could be considered a signal to future developers about moving to Alexandria.

"Its sends a terrible message," said Dipti Pidikiti-Smith, chairwoman of the Economic Opportunities Commission. "The move should not outweigh the need for affordable housing."